Core view
Recently, with the Federal Reserve accelerating the tightening of monetary policy, the interest rates of U.S. Treasury bonds of all maturities have increased, driving the 30-year fixed mortgage interest rate to break through 5%, a new high since 2011. Sam Khater, chief economist of Freddie Mac, said that mortgage interest rates may continue to rise this year due to the tightening expectation of multiple interest rate hikes by the Federal Reserve this year, but geopolitical conflicts and market concerns about economic growth may slow down the upward speed of mortgage interest rates. From the historical data, the rise of housing loan interest rate will increase residents' house purchase cost, restrain purchase demand and put pressure on the real estate market. However, considering the current situation of extremely low inventory in the U.S. real estate market, it is expected that the growth rate of house prices may slow down in the future, but house prices may remain high. In addition, real estate construction is closely related to house prices. When the growth rate of house prices slows down, the construction end will also tend to decline. According to the data released by the National Association of home builders, the confidence index of home builders fell to a new low in nearly seven months in April. Under the background of the shortage of wood and other building materials and the soaring mortgage interest rate, more and more builders are pessimistic about the housing market and their willingness to start construction is weakened.
